Licensing of insolvency practitioners

Who needs to be licensed and who you apply to

The Insolvency Practitioners Regulation Act 2019 requires insolvency practitioners to be licensed by an accredited body.

On this page:

Who must be licensed

Anyone acting as an insolvency practitioner must hold a licence issued by an accredited body. Licensed practitioners must act in accordance with the conditions of that licence.

An insolvency practitioner includes the following categories of people:

  • the liquidator of an insolvent body corporate in liquidation
  • the administrator or deed administrator of a company in voluntary administration
  • a receiver
  • a trustee or provisional trustee of personal insolvency creditor proposals.

A transitional period may apply to some insolvency practitioners. See further below for details of these transitional periods.

For more information, see the interpretation sections of the:

Who does not need to be licensed

The following roles or activities do not fall under the scope of the regulatory regime:

  • debt repayment order/summary instalment order supervisors
  • those giving advice about corporate or personal insolvencies (but not actually acting as an insolvency practitioner)
  • those providing restructuring and turnaround advice, and services prior to insolvency
  • budgeting advice services
  • management of solvent liquidations if you are:
    • a lawyer
    • a chartered accountant
    • members of recognised professional bodies.

You don’t need an insolvency practitioner’s licence if you only do these types of activity.

How to become licensed

You must apply to an accredited body if you want to be a licensed insolvency practitioner; the Registrar has no role in licensing decisions.

Qualifications

In order to be licensed, you must meet the minimum standards set out in the Insolvency Practitioners Regulation Act (Prescribed Minimum Standards, Conditions, and Requirements for Ongoing Competence, for Licensed Insolvency Practitioners) Notice 2020 (the Minimum Standards Notice). This includes experience requirements and continuing professional development obligations.

You must also meet any membership criteria set by the relevant accredited body.

Do you need to be an accountant?

Insolvency practitioner licences are not limited to accountants. However, administering insolvency engagements does require accounting experience. The Minimum Standards Notice therefore distinguishes between accountants holding Certificates of Public Practice (CPP) and others. Non-CPP holders must have 2,000 hours of senior insolvency engagement experience over the last 3 years. CPP holders must have 1,000 hours; this lower figure reflects the other accounting experience required to hold a CPP.

NZICA limits their membership to accountants. Non-accountants should therefore contact RITANZ to apply for a licence as an insolvency practitioner.

The Registrar has no role in licensing decisions; the Registrar cannot overrule accredited bodies’ decisions to grant or refuse an insolvency practitioner’s licence. The Act provides that any challenge to a licensing decision must be appealed to the High Court (see section 21 ), not the Registrar. 

Transitional provisions

Existing insolvency engagements (except liquidations of bodies corporate)

Insolvency practitioners (except liquidators of insolvent bodies corporate – see below) appointed to act in respect of insolvency engagements before 1 September 2020 may complete those existing engagements without an insolvency practitioners licence indefinitely. This includes receiverships, voluntary administration and personal insolvency creditors proposal trustees. People relying on this transitional period must not be appointed to act in respect of any new insolvency engagements from 1 September 2020 without obtaining a licence (or unless a transitional licence applies).

For further information, see schedule 1 of the Insolvency Practitioners Regulation Act 2019 .

Existing liquidations of insolvent bodies corporate

A one-year transitional period applies to liquidators of insolvent bodies corporate appointed to act before 1 September 2020. If this transitional period applies, the person does not need to be licensed as an insolvency practitioner. This transitional period is intended to allow liquidators that do not wish to become licensed to complete or transfer existing liquidations. People relying on this transitional period must not accept any further engagements to act as an insolvency practitioner after 1 September 2020 without obtaining a licence (or unless a transitional licence applies).

This transitional period only applies for one year. By the end of 1 September 2021, all people relying on this transitional period must:

  • complete all liquidation engagements; or
  • resign as liquidator; or
  • transfer liquidation engagements to a licensed insolvency practitioner; or
  • obtain a licence to act as an insolvency practitioner.

Note that special provisions apply to certain solvent liquidations of bodies corporate.

For further information, see schedule 1 of the Insolvency Practitioners Regulation Act 2019 .

Members of voluntary schemes

Insolvency practitioners that are accredited insolvency practitioners under the CAANZ-RITANZ voluntary scheme on 1 September 2020 may be eligible for a transitional insolvency practitioner licence. Transitional licence holders are treated as licensed insolvency practitioners as long as they remain members of the voluntary scheme. If you are an accredited member of the CAANZ-RITANZ voluntary scheme, please contact them directly. Please note that the requirements for transitional licences vary depending on membership status and it is important to contact CAANZ as soon as possible.

Transitional licence holders must apply for an insolvency practitioner’s licence by 1 January 2021. If a transitional licence holder does not apply for a licence by then, the transitional licence will expire and the person must not accept any new insolvency engagements and must wind down existing engagements in accordance with the “existing insolvency engagements” transitional period detailed above.

If a transitional licence holder does apply for an insolvency practitioners licence by 1 January 2021, the transitional licence will continue to apply until the accredited body makes a decision on that licence application, no later than 1 September 2021. If the accredited body issues an insolvency practitioners licence, the full licence will replace the transitional licence. If the accredited body declines to issue an insolvency practitioners licence, the transitional licence will expire 20 working days after the notice of the decision is communicated to the practitioner.

Overseas insolvency practitioners

The regulatory regime applies to all insolvencies in New Zealand, regardless of where the insolvency practitioner is based. Overseas insolvency practitioners must obtain a New Zealand insolvency practitioner’s licence before acting in a New Zealand insolvency.

Special provisions apply to insolvency practitioners licensed in Australia. A licensed Australian practitioner may temporarily act in a New Zealand insolvency, while applying for a New Zealand licence. Australian licensed insolvency practitioners must apply for a New Zealand licence within 10 days of being appointed to act in a New Zealand insolvency.

For further information, see section 10 of the Insolvency Practitioners Regulation Act 2019 .

Special provisions may also apply to other overseas insolvency practitioners in the future. However, the special provisions are currently limited to Australian licensed practitioners.

Liquidations of solvent bodies corporate

Liquidations of solvent bodies corporate may be carried out by:

  • a licensed insolvency practitioner
  • a lawyer
  • a chartered accountant
  • members of recognised professional bodies.

To be a solvent body corporate, the directors of the body corporate must make a declaration that, following due enquiry, the body corporate will be able to pay its debts in full within 12 months. See further in the new section 243A of the Companies Act 1993 .

Liquidations of bodies corporate that are insolvent must be carried out by a licensed insolvency practitioner.

No exemptions from licensing requirements

Anyone acting as an insolvency practitioner must be licensed. The Registrar or an accredited body cannot grant an exemption from the licensing requirements.

Last updated 1 September 2020